1 INVESTMENT IN FIBERS AS A CHALLENGE FOR R&D H. Harms Lenzing AG, A – 4860 Lenzing, Austria e-mail: [email protected] The recent announcements of Lenzing AG to 1980s when the textile world was said to be still expand its Austrian viscose fiber plant in doing well (figure 1). It is also commodities, Lenzing and its Lyocell fiber plant in such as polyester staple, where in spite of several Heiligenkreuz; Austria, came somewhat as a plant closures by traditional producers even surprise to the textile world. It seems that the small entrepreneurs identified business community believes that the current state of the opportunities and started investing in new industry could only produce news of plant grassroots capacities. The face value of the closures. Some of the players obviously fail to market assessment of many of the key players understand a decision to increase fiber capacities clearly does not reflect the whole picture! in Western Europe. For Lenzing it will be an 800 increase of more than 100.000 tons/year in less Viscose, Modal, Lyocell than a decade, which is more than just 700 PES staple compensating for the cumulative reductions of 600 other producers within the same period. The 500 question remains whether Lenzing is an 400 exception or whether it would have been better to follow the trend. 300 200 There have been a considerable number of plant closures in recent years. Many of the big, 100 traditional fiber producers have completely given 0 up their activities in the fiber field. Their market 1990 1992 1994 1996 1998 2000 2002 2004 analysis has taught them about the long-term Figure 1. Production capacities in Western Europe (tpa). shrinking consumption of their established products and the increased pressure on the margins. The consequence in most cases was a Everybody knows that there has been a huge “milking strategy”, sooner or later ending in mill change in the structure of the markets and there closures during one of the next downs in the are good reasons for the depressed moods of business cycle, often with the expectation of a many players in the industry. It is true that the better utilization of the remaining capacities. migration of textile manufacturing to cheap-labor However the pessimistic message of this type of countries has completely changed the scenarios. withdrawals often resulted in the complete The textile industry has been shaken and is still disappearance of the corresponding markets. being shaken by the pressure of cheap imports. Also Lenzing had to suffer from this type of The market is neither willing nor able to continue decisions when their renowned joint venture paying the profit margins for standard products partner insisted in closing their joint polyester expected by the fiber producers. But is reduction staple fiber plant in Austria. of capacities the only possible consequence of But is it really true that Europe is inevitably such a process? The future of the industry rather caught in the same trend as the US, where the seems to deal with the old issues of taking up a textile industry and the fiber producers servicing challenge and working on converting it into a it almost disappeared in the last decade? chance by starting with the “home exercise” to Surprisingly not only are capacities in man-made reduce the cost basis, to solve environmental cellulosics increasing again in Western Europe, problems, to adjust the quality to the increasingly reaching levels even above those of the late demanding downstream processing technologies, 2 to find new market segments, and to support the specialty market segments. Micro-fibers, spun- customers in doing this by offering new dyed fibers, UV-protection and flame retardant innovative fibers! But of course this is not properties are but a few of the features in that suitable for a “milking strategy”! Lenzing´s field. New fibers with further enhanced moisture capital investments, exceeding the 100 million absorbency and water retention are servicing Euro level, can only be understood in view of additional nonwovens and technical applications, many years of this type of “home exercise” - and which are presently the fastest growing market a lot of it has to do with constant investment in segments in Western Europe. A new fiber with R&D. Lenzing has been able to solve the improved dyeing properties offers substantial environmental challenges inherent to the advantages to the downstream processing technologies employed and now is a model for industries and to fashion designers. environmentally friendly viscose fiber In contrast to the widespread opinion, there are production. Innovative processes have been several examples that companies producing or developed to produce fine chemicals from former processing fibers in Western Europe still have a pulping process emissions, which now chance to prosper, if they take the challenge and considerably reduce the costs for dissolving pulp, refocus on the traditional strengths of European the major raw material. manufacturing industries. The recent incidents in Continuous development efforts have resulted in some of the service- and “new markets”- a significant improvement of Lenzing´s product industries in the US have shown that benchmarks portfolio. The wide technological basis available of continuous upward trends are not realistic, to Lenzing - with the viscose, modal, and despite occasional impressions that this is so. recently the Lyocell process - offers wide We have good chances if we concentrate on possibilities for producing all the variety of fibers flexibility, efficiency and diversification, on for the special needs of the market. It is because innovative products and new technologies. One of a drastic improvement of the technological of the strongest assets in this context is the properties that they are able to meet the excellent education of the available work force. demanding needs of today’s high performance But this also requires a culture of stability and textile industries in Western Europe. Support of long-term thinking. Similar to production plants, innovative looks, new drapes, new hands and which cannot not work without proper special effects are equally crucial for success in maintenance and capital expenditures, innovative the fast-changing and fashion-driven textile products and new technologies will not be world. available without consistent R&D as well as an From about 30% only 10 years ago, Lenzing is efficient and flexible high-quality work force, now selling more than 60% of its production into which also requires proper care and handling. 3 VISCOSE STAPLE FIBER - HISTORY AND TRADE FLOW OF FIBER AND DOWNSTREAM TEXTILE PRODUCTS Franz Kogler Feldweg 1, A – 4890 Frankenmarkt, Austria Production and consumption of viscose 2000 staple fiber 1500 Viscose staple fiber still plays a significant role in the world fiber market, although if we look 1000 Eastern Europe back 30 years, it lost market share to the fast others growing synthetic fibers and cotton. Total 500 world fiber consumption increased from 22 0 million tons in 1970 to over 50 million tons in 1970 1980 1990 2000 2001. This includes both natural and man-made fibers, staple and filaments (Figure 1). Figure 3. Viscose consumption increased. 30 As with other fibers, viscose staple fiber mill consumption moved significantly to Asia from 25 other parts of the world (Figures 4 and 5). Today, 20 Viscose Staple the Asian countries account for three quarters of 15 Wool Cotton the world mill consumption of viscose staple for 10 other MMF textile applications, while Western Europe is 5 dominant in mill consumption for nonwovens 0 1970 1980 1990 2000 applications (Figure 6). Figure 1. World consumption of fibers. 1600 1400 Viscose staple consumption was 2 million tons 1200 1000 Asia worldwide in 1970 and was only 1.6 million in 800 2001, mainly due to a sharp decline in Eastern 600 Rest of the Europe after the political changes in the late 400 World 1980s. In fact, viscose staple consumption has 200 0 grown slightly, if we disregard the development 1970 1980 1990 2000 in Eastern Europe (Figures 2 and 3). Figure 4. Shift of viscose staple fiber consumption to Asia. 1600 2500 1400 others 2000 1200 Eastern Europe 1500 1000 ASIA 800 Textiles 1000 North America 600 Nonwovens 500 Western Europe 400 0 200 1970 1980 1990 2000 0 1996 1997 1998 1999 2000 2001 Figure 2. World consumption of viscose staple went Figure 5. Nonwovens share of world consumption of down mainly due to development in Eastern Europe. viscose staple is rising. 4 1000 400 800 300 600 200 Textile 100 Production 400 Nonwovens 0 Net Trade 200 -100 0 WE USA Asien Übrige Figure 6. Asia processes 75 % of viscose staple for textiles, Western Europe is dominant in nonwovens. Figure 8. Viscose fiber trade flow 2000. China, Western Europe, India and Indonesia are 1200 the countries with the highest mill consumption 1000 of viscose staple fiber today, followed by the 800 USA, Taiwan, Turkey, Japan, Thailand and 600 Production Korea. These 10 countries accounted for 90 % 400 Mill of the total world consumption in 2000, as 200 Consumption showninFigure7. 0 400 350 300 Figure 9. Within the trade blocs, production and 250 consumption of viscose staple is rather balanced. 200 150 Yarn Trade Flow 100 50 0 The effects of globalization can also be seen in the substantial trade of viscose spun yarns. India, Indonesia and Thailand are the most important net-exporters today. Western Europe and China Figure 7. Viscose mill consumption – the top 10 also are important export countries, but with high countries account for 90 % of the world consumption in imports actually net importers. Importing 2000. countries with hardly any viscose spun yarn exports are South Korea, USA, Turkey and Japan. Fiber Trade Flow Taiwan’s imports and exports are approximately balanced.